William Blair analyst Ryan Merkel has maintained their bullish stance on JHX stock, giving a Buy rating on September 30.
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Ryan Merkel has given his Buy rating due to a combination of factors that suggest a positive outlook for James Hardie Industries PLC. The company’s fiscal second-quarter EBITDA exceeded expectations by 19%, largely because anticipated channel destocking did not occur, and the performance of siding and trim products was better than initially feared. This unexpected outcome has boosted investor confidence, as reflected in a 9% increase in the company’s share price.
Despite concerns about the sluggish demand environment and challenges in new construction within the Sunbelt region, the worst-case scenario appears to have been avoided. The company plans to update its full-year guidance in late November, and the impact of destocking is expected to be limited to the first quarter. Adjustments to revenue projections, including an additional $100 million due to the lack of further destocking, and improved sell-through assumptions for the second half, support the positive outlook and justify the Buy rating.
According to TipRanks, Merkel is a 4-star analyst with an average return of 7.9% and a 57.05% success rate. Merkel covers the Industrials sector, focusing on stocks such as Fastenal Company, Trex Company, and SiteOne Landscape Supply.
In another report released on September 30, Wolfe Research also initiated coverage with a Buy rating on the stock with a $25.00 price target.